Domestic Currency Vs. Foreign Currency Online Casino Transactions

The best way to avoid unnecessary additional losses to your casino bankroll is to find an online casino that accepts your domestic currency. With casino game RTPs already giving the house an advantage, you should avoid having to pay exchange rate fees or losing money due to poor currency exchange rates.

In this guide, I am going to explain the reasons for and against this statement.

Table of Contents

The goal is to give you a clear picture of the fees and spreads used for exchange rates that negatively affect your casino bankroll management when using a foreign currency to gamble online.

You will discover how a financial term known as ‘spreads’ can eat away at your casino bankroll when making currency conversions to deposit or withdraw to or from your online gambling site. To support my argument, I have include an example of how spreads can reduce a slot’s RTP from 96% to 90.33% and how spreads can increase Blackjack’s house edge 1172x from a simple 3% spread.

I have also provided another section that covers how banking fees can also take a chunk out of your casino bankroll. These fees usually apply when withdrawing a foreign currency into your bank account using direct bank transfers or credit/debit cards withdrawals.

Although so far the introduction to this guide sounds pessimistic, I also have some good news covering online banking apps that provide you with multi-currency balances. These apps also provide you with debit cards and currency exchange services that come with no spreads and low currency conversion fees.

As a result of reading this guide, you will understand how to efficiently manage your casino bankroll and maximise your winnings by avoiding unnecessary banking fees and extortionate spreads charged by some financial providers.

However, before I get into the complexities of spreads and exchange rate fees, I will start with the simple topic of deposit and withdrawal options available to you. This is for the benefit of those of you who are new to online casino gaming.

Which Deposit and Withdrawal Methods Do Online Casinos Offer?

How many of you have purchased clothes or booked a holiday online? This is all thanks to the evolution of eComm, which has become a global multi-trillion-dollar industry since the internet first came online decades ago.

Online casinos are another cog in this sprawling world of online financial transactions. As a result, casino operators go out of their way to include as many payment options as possible.

Here are just a few examples:

• Debit and Credit Card Payments
• eWallets like PayPal and Skrill
• Banking apps like Trustly and Interac
• Digital cards like Paysafecard and Neosurf
• Cryptocurrency (for Curacao licenced online casinos)

For the benefit of those of you who are new to online gambling, first, you need to understand the withdrawal options available to you. You can head over to our online casino payments guide here or via the menu option above for a comprehensive overview of the deposit and withdrawal options that are available to you.

How FOREX Spreads Negatively Affect Your Bankroll Management

You probably already understand how exchange rates work if you travel or purchase overseas goods. The basic concept is that every currency has a pairing like GBP/USD or INR/CAD and so on.

The issue for most people who regularly exchange currencies is something called the spread. The spread is the live FOREX market’s exchange rate for a currency pairing versus the exchange rate your payment provider is willing to give you.

Current FOREX Rate: 1 EUR = 1.0728611 USD

Example of a 3.74% Spread For An Online Casino Deposit

• FOREX Market Exchange Rate: 1 EUR = 1.07 USD
• Your Payment Provider’s Rate: 1 EUR = 1.03 USD

The spread here is 1.07 minus 1.03 = 0.4. As a result, if you decide to play casino games using USD, when you deposit using USD, you are already losing 3.74% of the value of your Euro balance.

What About in Reverse For an Online Casino Withdrawal?

The same applies when you cash out. Your payment provider will try to make money from you once again by offering a less-than-attractive exchange rate versus the current FOREX market’s rate.

Here is an example of a 3.74% spread in reverse:

• FOREX Market Exchange Rate: 1 USD = 0.93 EUR
• Your Payment Provider’s Rate: 1 USD – 0.97 EUR

Now when you cash out from your online casino, you are losing another 3.74% on your bankroll. That’s 3.74% lost on the deposit, plus another 3.74% lost on your withdrawal.

Real Life Example of Exchange Rate Spreads

I used my PayPal to look at the current exchange rate in PayPal versus the going real time FOREX market rate on the XE financial website here. You can see there is a spread of 0.0327611 between the market rate and PayPal’s rate, which means you would lose 3.05% on deposits and another 3.05% on withdrawals.

PayPal EUR to USD Exchange Rate Example

Actual FOREX Exchange Rate Example

Most eWallets offer terrible exchange rates giving themselves a large spread to make a profit on all foreign currency exchanges, plus when you cash out to an eWallet there is usually a fee on top. However, there are some payment solution out there like Wise (formerly Transfer Wise) that offer fair exchange rates.

Spreads Can Reduce an Online Slot’s 96% RTP to 90.33%

If you play slots aiming for an average RTP (return to play) of 96%, your overall deposit is already down 3% from the spread. Rather than earning 96 USD back from $100, you are already starting with $97.00 and will only earn back 93.12 USD.

When you cash out that $93.12 and then exchange it back to your domestic currency, you lose another 3%, which is 90.33 USD. Although I have given you an oversimplified breakdown of RTP here (not accounting for variation), you get the picture.

Spreads Can Increase Blackjack’s 0.5% House Edge 1172x to 6.36%

For those of you who are playing Blackjack using its basic strategy charts, you are probably quite serious about playing a perfect game according to the house edge. However, if you choose the wrong deposit and withdrawal methods when playing using a currency other than your domestic currency, you will lose a percentage of your house edge.

Let’s again use the $100 as the example deposit amount and a 3% spread. You start with a $97.00 balance after you exchange your domestic currency for dollars, thus losing $3.00 in the process. With Blackjack’s 0.5% house edge, this works out as a 99.5% RTP, so let’s simplify things and say you play through the $97.00 and win back 99.5%.

You now have a balance of $96.52 from your winnings, compared to the $99.5 you would have if you played using your domestic currency. Also, now you are cashing out, we need to deduct another 3% for the spread when you exchange your dollars for domestic currency, so now you have $93.62.

Rather than cashing out with $99.50 per the 99.5% RTP, you are now cashing out for a balance of $93.62, recording a loss of $6.38. The result is that your Blackjack RTP has been reduced to 93.62%, and the house edge has risen to 6.36%, which is a huge 1172% increase on the original 0.5%.

How Exchange Rate Fees Negatively Affect Your Bankroll Management

In the example above covering the percentage losses from spreads, you may have also noticed that some payment providers charge a fee when you exchange currencies.

High Street Bank Transfer and Credit/Debit Card Fees

This section applies to casino players who use bank transfers to withdraw if their original payment method is not available for withdrawals. Meanwhile, the same spreads and exchange fees as bank transfers usually apply as your credit or debit cards are usually connected to a bank.

• Most high street banks will have a small spread and add a fee if a foreign currency is being paid into your bank account via bank transfer or credit/debit card withdrawals. The fees are usually for bank accounts that only support a single currency, so the bank will need to convert incoming funds to the currency the account supports, and this is why they apply an exchange rate fee.

eWallet Exchange Rate Fees

eWallet fees vary, with some not charging a fee but making money from the spread, while others charge a flat rate. If, after reading this guide, you are still planning on using an eWallet to convert one currency to another, research how the eWallet charges for these conversions.

• Most eWallets like Skrill and PayPal do not charge an exchange rate fee; instead, they use the spread to make money from currency conversions. The spreads are usually more costly than fees paid at some high street banks.
• eWallets like MuchBetter use the live FOREX market exchange rates and charge a flat percentage for converting foreign currencies.

Exchange rate fees have a negative impact on casino game RTPs: You can use a similar calculation as we used in the section above covering how spreads reduce RTPs and increase house edge by replacing the spread percentage with the amount of the fees.

Online Banking with Wise or Revolut

Using online banks is a cost effective way to deposit and withdraw to online casinos using a currency other than your domestic currency.

• Online banks like Wise.com and Revolut offer multi-currency support, and there are generally no fees for holding a balance in a foreign currency. For example, I use Wise, and I can top an online casino using my USD, CAD, or GBP balances depending on which country I am playing from.

• Wise and Revolut use the live FOREX market rate when you use their exchange rate calculators to get a quote to convert one foreign currency to another, therefore there is no spread. There is however a small fee, which is much less than a high street bank would charge.

*As you can see from the Wise Exchange rate calculator, there is only a 0.35 GBP fee. That’s a mere 0.35% to convert to USD, and Wise has no spread because its uses live FOREX market rates.

Cryptocurrency Spreads and Fees

Cryptocurrencies are another ball game altogether when it comes to exchanging crypto for cash and vice versa. All kinds of fees apply depending on the crypto network you choose and the spreads the exchange applies.

The CoinCorner screenshot below shows that a large crypto transaction for a high roller could cost up to 55.87 GBP on CoinCorner, which is only 1% of the transaction. I also typed in some more GBP to BTC exchanges using CoinCorner, and here are some results.

There will also be additional fees when depositing a crypto casino account and cashing out. You will probably pay around 3% in fees when all is said and done, reducing the RTP for any casino games you play.

Is crypto worthwhile? It is if you are investing in crypto anyway. Most crypto casino players are invested in the crypto they play with and they are looking to make gains from their investment due to the crypto market’s high volatility, but be warned, gains are never guaranteed when it comes to cryptocurrency.

The Final Verdict

The various financial payment and withdrawal options available to you rarely give you a fair exchange rate.

There are some exceptions like Wise (Formerly TransferWise), which markets itself as an online bank that offers fair exchange rates and low fees. However, as good as Wise is, there are stills some small fees to pay, but they will barely affect your bankroll management or the RTPs on your proffered casino games.

For the most part most online casino deposit options like eWallets and banks use a spread or margin that does not match the real market currency exchange rate. On top of this, some casino withdrawal options will hit you with the spread and a fee.

In the end, playing casino games using a foreign currency and cashout to convert back to your domestic currency will come at a cost. In turn, the charges and/or spreads when making the exchange affects how efficiently you manage your casino bankroll.

Fun Fact For UK Players: UK players often choose to play using USD because the exchange rate from GBP to USD offers between 20% and 10% lower minimum bets when playing casino games. If you want to learn more, then head over to our guide to playing at online casinos with a different currency.

FAQ

Which countries does the Casinoplusbonus website offer online casino advice?

Another option is to head directly to the page here on Casinoplusbonus dedicated to your country. We cover Ireland, the UK, New Zealand, South Africa, India, and Canada as per the table at the bottom of this guide and our ‘Best Online Casino’ menu option.

What does the financial term spread mean?

When you exchange a foreign currency to your domestic currency, the first step you will take is choose a currency pairing, for example, USD to CAD. The spread is the difference between the USD/CAD FOREX market rate and the lower exchange rate the bank gives you.

Why do some casino players play using cryptocurrencies?

Most cryptocurrency casino players are investing and choose to also use a portion of their investment to gamble. The idea is that while they play, the value of crypto will rise in the long run, which of course is not guaranteed due to the crypto market’s high volatility.

Are there any payment options with low exchange rate fees?

Yes. In this guide, we mentioned Wise.com, an online banking facility allowing you to store multiple currencies. The fee example in the screenshot shows that a 100 GBP transfer gives you a live market rate (no spread) and a low 0.35% exchange rate fee.